The 2.00% -1year CDs have almost all but disappeared, especially in a healthy bank. Well our searching high and low has found one. Okay, its a 13-month term, but what is 30-days among friends. $100,000 minimum, $250,000 is okay, too. This bank is FDIC insured. They have a 5-star rating from Bauer. The Bank isn’t a mega-bank so not sure how long the rate will last.

[Update 4/7/2010: The above rate offer has expired. I will still extend our discount offer on other purchases however.]

Send us a contact request or call and mention this blog post for a 20% discount on our fee. This rate is only good for personal funds only. Other banks and credit unions aren’t allowed, sorry.

Also as mentioned earlier, I’ve been busy completing articles for a 30-Day challenge. Here are some of those if you want some bedtime reading.

Best CD Rates – March 2010 Update Redux
Is My Bank Healthy
How Much FDIC Insurance Do I have
Credit Rating Agencies

And not to get Biblical on you, but check-out Psalms 118:8. It is reported to be the exact middle of the Bible when it comes to number of verses before and after. It is sandwiched between the shortest chapter, Psalm 117 and the longest Psalm 119.

Have a blessed day.
cd :O)

I wrote a series of articles on various investments that are generally deemed safe. I actually posted them with an article directory that I’ve enjoyed writing for. Anyway, here are the links. Let me know what you think.

Have an awesome weekend. And remember above all else, God is in control.

Safe Investments Part I
Safe Investments Part II
Safe Investments Part III
Safe Investments Part IV

cd :O)

The FDIC has basically established a national rate for CDs. You’ll find it quite difficult to find any bank offering above 1.60% for 1-year CDs. You may be wondering why. Starting January 1, 2010, under capitalized banks have to set rates at or below the Weekly rates that the FDIC publishes. Here is a link.

What is interesting that even healthy banks are deciding to follow the rate cap. I guess they figure if the FDIC thinks that is a “good” level they might as well fall in place. Many are even offering lower rates. We have even heard of some pressure from bank examiners telling banks, healthy or not, that they shouldn’t be paying rates higher than the cap.

Honestly, when the law was passed I didn’t really see this as the outcome. I thought it might make it harder for the unhealthy banks to raise deposits and thus decrease potential losses if the bank fails. I see the opposite happening. With many healthy banks posting lower rates, the unhealthy banks are still able to easily bring in deposits.

Regardless it is very frustrating to see the government stepping in so strongly to basically regulate the rates that banks pay. It is also interesting to note that although banks haven’t strayed too far from the posted CD rates, many are still out there with high yield savings and checking account specials.

Another interesting development is to see banks work around the caps with creative penalties. For instance we have seen a couple of banks offer 2-Year rates with a zero penalty after 1-year. That effectively allows them to use the higher 2-year rate for a 1-year CD. Also goes to show you that creativity can “trump” governmental restrictions. Also goes to show you that governmental restrictions are rarely thought out well enough and often have the opposite effect of what was hoped or intended.

Two good notes. Credit Unions are not regulated by the FDIC and thus have no rate cap. There are still a few out there posting 2% or above for 1-year CDs. Secondly, there is a bank with a 2Y at 2.53% APY with a 1x bump and a 3Y at 2.79% APY with a 2x bump. Shoot a message and use the magic words, “Awesome Rates” and I’ll give you a 20% discount from our normal fee.

[Update 3/11/10: The 2Y bump rate dropped to 1.88% and the 3Y dropped to 2.21%. At this point a 5-year with a low closure penalty may be the best option]

Have a great weekend.
cd :O)